NEW YORK (TheStreet) - Which university overtook Yale, Stanford, Princeton and Massachusetts Institute of Technology to be the second biggest endowment fund in the country last year?
The answer will surprise you. The institution isn't an Ivy League school, but rather a state school that counts First Lady Laura Bush, ExxonMobil (XOM) CEO Rex Tillerson, Dell founder Michael Dell and Southwest Airlines (LUV) CEO Gary Kelly, among its alumni.
Endowments from 832 U.S. colleges and universities returned an average of 15.5% for the fiscal 2014 year (which ended June 30, 2014), up from 11.7% return in 2013, according to a January study by the National Association of College and University Business Officers.
The participating universities in NACUBO's study represented $516 billion in assets. The endowment funds, on average, accounted for 9.2% percent of institutions' total operating budgets, a slight increase from the year prior, the study said.
The increase in return rates has enabled colleges and universities to increase their spending, which in turn supports more student financial aid programs, faculty research and other activities, NACUBO said.
U.S. stocks led the way for these endowments in 2014, returning 22.8%, followed by international equities, at 19.2%. Approximately 51% endowment assets from the study's participating colleges were in alternative strategies followed by international equities (19%) and domestic equities (17%).
Within alternative strategies, venture capital investments had the highest returns in 2014, at 23.3% compared to a 6.1% return in 2013, the study found. Private equity (which included leverage buyouts, mezzanine, M&A funds and international private equity) followed at an average 16.5% return and natural resource investments had an average return of 15.3% in fiscal 2014, the study said.
So, which universities have the biggest endowment funds? Not all of the Ivy League schools made the top of the list. TheStreet used data compiled by Bloomberg and included tuition expenses for each of the universities. Check out which universities made the top 12.
12. University of Notre Dame
South Bend, Ind.
Assets Under Management (6/30/2014): $8 billion
One-year return: 19.7%
Three-year return: 13.2%
University of Notre Dame's endowment had approximately 38% of its holdings in public equities; 29% in private equity; 14% in real assets (precious metals, commodities, real estate); 13% in marketable alternatives and 5% in fixed income, Bloomberg said, citing Notre Dame's investment review.
Full-time tuition, room and board for the 2014-2015 academic year for undergraduates totaled $35,702 at Notre Dame.
New York, N.Y.
Assets Under Management (6/30/2014): $9.2 billion
One-year return: 17.5%
Three-year return: 10.2%
Columbia's endowment doesn't disclose its current asset or target allocation. However university holdings, which may include non-endowment funds, show 29.7% in absolute return strategies; 21.6% in private equity; 20% in global equities; real assets making up 18% of its portfolio and cash and fixed income making up the rest, Bloomberg said, citing the school's financial disclosures.
The cost for tuition and fees for the 2014-2015 year was $51,008.